Zynex, Inc. (NASDAQ: ZYXI) filed for Chapter 11 protection on December 15, 2025, and publicly disclosed the filing the following day. The company cited lender‑backed financing to address a severe liquidity crunch that had been exacerbated by a 73% year‑over‑year drop in Q3 2025 revenue to $13.4 million, compared with $50.0 million in the same quarter a year earlier.
The revenue collapse was driven largely by a suspension of payments from the U.S. Department of Defense’s Tricare program, which accounts for a significant portion of Zynex’s business. Changes in payer claim submission and review practices led to widespread denials and payment delays, while early‑2025 workforce reductions further dampened device orders and new patient onboarding. The company’s operating margin contracted from 80% in Q3 2024 to 60% in Q3 2025, reflecting the loss of high‑margin Tricare revenue without a corresponding drop in cost of revenue.
Zynex also entered a 30‑day grace period for a $1.5 million interest payment on its $60 million convertible notes due in May 2026, a move that underscored the urgency of the liquidity crisis. The company’s total debt stood at $71.62 million against a negative EBITDA of $32.38 million for the trailing twelve months, highlighting the scale of its leverage relative to cash flow generation.
CEO Steven Dyson said the filing “is the next step in creating a new future for Zynex.” He emphasized that the lenders’ confidence and the new financing package would allow the company to continue operations, preserve its product lines, and pursue a debt‑restructuring plan aimed at restoring long‑term viability. Dyson also noted that the restructuring would provide a framework to address compliance and business‑model challenges that have plagued the company.
Market reaction to the filing was sharply negative, with the stock falling 47%–58% on the day of the announcement. Analysts cited the bankruptcy filing itself as the primary driver, noting that the combination of a steep revenue decline, liquidity constraints, and a significant interest‑payment default signaled deep financial distress. The reaction reflected investor concerns that the restructuring may not fully resolve the underlying payer‑revenue dependency and that the company’s negative margins and high debt burden could limit its ability to rebound.
The filing marks a critical juncture for Zynex. While the Chapter 11 process offers a chance to reorganize debt and stabilize cash flow, the company must rebuild payer relationships, reverse workforce reductions, and restore revenue growth to emerge from bankruptcy. Failure to address these headwinds could result in asset liquidation or a protracted restructuring that erodes shareholder value.
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